Private schools will no longer be required to provide free and subsidised
places to pupils from poor families under major new guidelines for charities
published today.

In a key victory for the independent education sector, it emerged that schools would be given complete freedom to justify their charitable status – allowing them to remain in business and hang on to millions of pounds worth of tax breaks.

New guidance from the Charity Commission says that organisations will be required to provide benefits to “people of modest means” that are “more than minimal or token”.

It also warns that “luxury” institutions would be required to do the most to justify their charitable status.

But new guidelines make it clear that schools will be given complete freedom to decide how to open up to the poor, suggesting they can run A-level master-classes for deprived pupils, second teachers to state schools and share their playing fields to meet the requirements.

The move draws a line under more than five years of uncertainty for private schools amid claims that previous guidelines governing charitable status risked driving up fees and forcing some schools out of business altogether.

It also follows a lengthy battle by the Independent Schools Council which resulted in the old guidance being quashed by the country’s highest tribunal court.

Matthew Burgess, ISC general secretary, said today’s guidelines “don’t try to be prescriptive in the way that the former guidance was", adding: "It doesn’t get itself into areas that are ideologically charged”.

“They key thing is that [school] trustees take the lead,” he said. “It is a wide discretion that they have got.”

Under Labour’s 2006 Charities Act, fee-paying schools are no longer automatically entitled to charitable status and must prove they provide wider “public benefit”.

The Commission subsequently produced detailed guidance outlining how around 1,000 independent schools in England and Wales could pass the test.

But the ISC claimed the document constituted a “gross misinterpretation” of the law because it placed too much focus on direct access – effectively free and subsidised places – as the clearest way to justify charitable status.

As part of a test case, two schools were even required to increase the number of bursaries to meet the public benefit requirements.

However, the old guidance was eventually scrapped in 2011 after a court ruling.

Today’s guidance says: “It is for a charity’s trustees to decide, taking into account all the circumstances of their charity, what provision (in addition to what would be more than minimal or token provision) to make to enable the poor to benefit.”

The document suggests that schools providing a “luxury service” and charging the highest fees would have to do the most to ensure “someone of modest means” can benefit.

The Commission provides a list of suggested services that fee-paying schools could provide to justify their charitable status. This includes:

• Offering bursaries or assisted places;

• Sponsoring one of the Government new flagship academies;

• Allowing pupils from local state schools to use its swimming pool, sports hall, astro turf, playing fields or concert facilities;

• Preparing state-educated pupils for entry to top universities;

• Formally seconding teachers to other state schools or colleges in specialist subjects such as the sciences and foreign languages.

A Charity Commission spokeswoman said: “Recent developments have confirmed that public benefit is absolutely integral to how a charity is set up and run.

“However, it is not for the commission to decide how this is carried out in the context of a charity’s activities – it is up to the trustees of fee-charging charities to decide how to make their services or facilities available for the poor to benefit.”